Geospace Technologies Corporation (NASDAQ:GEOS) Q2 2024 Earnings Call Transcript

Geospace Technologies Corporation (NASDAQ:GEOS) Q2 2024 Earnings Call Transcript May 10, 2024

Geospace Technologies Corporation isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Welcome to the Geospace Technologies Second Quarter 2024 Earnings Conference Call. Hosting the call today from Geospace is Mr. Rick Wheeler, President and Chief Executive Officer. He is joined by Robert Curda, the company's Chief Financial Officer. Today's call is being recorded and will be available on the Geospace Technologies Investor Relations website following the call. At this time all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions] It is now my pleasure to turn the floor over to Rick Wheeler. Sir, you may begin.

Rick Wheeler: Thank you, Jamie. Good morning, and welcome to Geospace Technologies conference call for the second quarter of fiscal year 2024. As mentioned, I'm Rick Wheeler, the company's President and Chief Executive Officer, and I'm joined by Robert Curda, the company's Chief Financial Officer. In our prepared remarks, I'll first provide an overview of the second quarter, and Robert will then follow-up with more in-depth commentary on our financial performance. After some final comments, we'll open the line for questions. Today's commentary on markets revenue, planned operations and capital expenditures may be considered forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on what we know now, but actual outcomes are affected by uncertainties beyond our control or prediction.

Both known and unknown risks can lead to results that differ from what is said or implied today. Some of these risks and uncertainties are discussed in our SEC Form 10-K and 10-Q filings. For convenience, as was mentioned, we will link a recording of this call on the Investor Relations page of our geospace.com website, which I invite everyone to browse through and learn more about Geospace, our subsidiaries and our products. Note that today recorded information is time sensitive and may not be accurate at the time one listens to the replay. Yesterday, after the market closed, we released our financial results for the second quarter and first six months of fiscal year 2024, which ended March 31, 2024. After reaching the halfway mark of the fiscal year, the company has recorded positive net income of $8.4 million or $0.62 per share.

Following the profitable results of last year, the first-half of fiscal year 2024 serves as a strong indication that our strategic efforts towards sustained profitability are at work. Furthermore, the long-standing strength of our balance sheet remains firmly intact with no debt and over $51 million in cash and short-term investments. However, low utilization of our OBX and Mariner ocean bottom nodes did have an unfavorable impact on our oil and gas market segment, where second quarter revenue fell short of the previous six quarters. This led to an overall net loss for the isolated second quarter of $4.3 million. Although no specific guidance was provided, we did mention in our conference call that some gaps in our OBX rental contracts were expected which became a driving factor in lowering second quarter revenue set to be received in the second quarter was actually brought forward into the first quarter.

When a rental contract for our new Mariner ocean bottom nodes was converted to a $30 million saving. Despite these circumstances affecting the second quarter, we do believe the second half of the fiscal year will see better utilization of our ocean-bottom nodes, which should bolster performance of our oil and gas market segment. Our adjacent markets segment showed strong performance in the second quarter, generating revenue of $12.2 million. This figure represents the third highest quarterly revenue from this segment in the company's history coming close to matching a record-setting amount of last year's second quarter. We believe these results demonstrate that our long-standing strategy of creating an increasing stable source of revenue from the adjacent market segment through expanded product lines and nurtured growth is working, while offering less volatility than our oil and gas market segment.

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